Cook County sued by white business owner, stopping grant program aimed at bridging ‘racial wealth’ gap – Chicago Tribune

Cook County has shut down one of its state-funded small business grant programs after it was sued for being unconstitutional.

The lawsuit, filed in December on behalf of Chicago chiropractor Domenic Cusano Jr., alleges that the Small Business Source Grow Grant program treated applicants “differently based on the race of their owners and particularly prioritized individuals of color.” ”

The lawsuit alleged that this was a violation of the Fourteenth Amendment’s equal protection clause, “discriminating against persons on the basis of their racial group membership,” and that Cusano, who “identifies as white and Caucasian,” was not “on an equal footing” with other applicants. The lawsuit was filed by California-based law firm Pacific Legal Foundation, which, according to its website, “defends Americans’ freedoms when they are threatened by government encroachment and abuse.”

“Recently, a lawsuit was filed against the county over the Cook County Grow Grant program,” the program’s website reads. “In order to help small businesses as quickly as possible, we have decided to rescind the Grow Grant program and restructure and redesign our small business grant program.”

“It’s wrong for the government to give preferential treatment based on race,” Andrew Quinio, an attorney for the Pacific Legal Foundation, said in a press release when the case was filed. “The government, in complete disregard of the Constitution, is trying to select winners and losers on the basis of race. The 14th Amendment protects individuals from discrimination based on arbitrary classifications such as race.”

Grow Grant was announced at the end of September. Funding from the federal COVID-19 American Rescue Plan Act was set to award $71 million in grants to small businesses in early 2023. The county’s Bureau of Economic Development planned to provide $10,000 in grants “paired with personal business counseling” for historically marginalized businesses — including those owned by entrepreneurs of color, women, veterans, LGBQT+ and people with disabilities — to promote racial affluence – and to close gaps in opportunity,” says a publication by the district.

Applicants had to be a for-profit Cook County company with fewer than 20 employees that was in operation prior to the pandemic and “have experienced a decrease in revenue or gross receipts, increased costs, or greater financial uncertainty as a result of COVID.” Applicants were asked to indicate their ethnicity and race, and whether the company was at least 51% owned, operated and controlled by minorities. The program’s hiatus was first reported by Cook County Record.

“There were no restrictions on applicants,” Nick Mathiowdis, a spokesman for Preckwinkle, told the Tribune in an email. “Any company that met the eligibility criteria below and submitted their application with all the correct documentation would have been considered.”

The motion also noted that “historically excluded populations” would be prioritised, however.

Cusano’s complaint asked that the county be permanently barred from “enforcing” the prioritization of minority business owners under the program, paying attorneys’ fees and paying $1 in damages.

The 22,000 people who applied for help in October have since been in limbo, WBBM-Ch. 2 reported earlier this month. County officials plan to launch a larger program in the coming months, but business owners will need to reapply.

“We have decided to scrap, restructure and refine the program to try and get the money out to small businesses as quickly as possible…rather than trying to litigate,” Preckwinkle said at a news conference Thursday after the monthly meeting of the board county board.

Cusano could not be reached for comment Friday, but Quinio, his attorney, released a statement saying it was “encouraging that the county has stepped away from its discriminatory program.” We look forward to ensuring that all small business owners, regardless of the color of their skin, have a fair and equal chance to receive support. The county should never use a crisis to violate the constitution.”

When asked if the county had concerns that the program could be considered discriminatory when released, Laura Lechowicz Felicione, special counsel for Preckwinkle’s office, said: “We believe we had strong arguments based on the individuals and communities that were hardest hit by COVID. We felt comfortable structuring and awarding the grant, but based on the litigation it may take time to fight this out in court.”

“We will work with our sub-recipients and referral partners to restructure the grant,” continued Lechowicz Felicione. “We will likely look at qualifying census areas” and return a revised program to the county board for approval “in late spring or early summer.”

“All business information contained in a submitted Grow Grant application remains confidential and secure,” said Mathiowdis. The revised grant program will “contain additional funds” not spent from the county’s $1 billion ARP distribution. “Companies that have previously applied must reapply, but may not be required to resubmit documents previously provided.”

Preckwinkle encouraged businesses to visit the Cook County Small Business Source website, which hosts business events and advisory sessions.

aquig@chicagotribune.com